20 November 2015

Compete globaly, that’s the question

UNCTAD (United Nations Conference on Trade and Development) has recently published its annual reporting corresponding to 2015. It analyzes the global growth situation after financial crisis 2008-9 and the recovery in 2010. According to the mentioned reporting, global growth of 2,5% is expected for this year.

Besides this, USA has signed the Pacific Trade Agreement with 11 nations, the most ambitious ever. TTP will reduce the commercial barriers and fix the common standard of the region, reaching the 40% of the worldwide economy.

With all this we can therefore say that there is a worldwide trend to the expansion and internalisation. Trade between countries is even more intense and companies must compete and they do in a global market.

The competitiveness of a company has a global dimension. There are currently not barriers in most markets. Technology and development and the optimization of logistics make more products and services can be sold in a free market.

Internalisation is a complex process. We can consider putting on the market our products and services abroad and at the same time to establish a subsidiary company, as the base for operating in the territory.

It is important to define if we are going alone or with a local partner. Besides this, we need to know what the internal changes of our organisation are in order to succeed the internalisation: product type or service, logistics, delivery, financing, legal form or reporting.

Every country needs a careful analyse for its internalisation. Every market and jurisdiction has their own singularities.

The critical factor for succeed abroad are Human Resources. Professionals are essential. Besides this there is branding, the prestigious or a successful past process. Curiously financial resources are less critical and problematic.

Although the complexity of internalisation process, we must take advantage of local market opportunities. If we don't do it, someone will do. Increasing competitiveness forces the company to be ingenious in order to be different in a world where everybody does the same.

Get clients and promote loyalty means to adapt to their needs. That is local approach. It is difficult to take tailored decisions for clients from the distance. Shopping habits, the way buyers interact or how they are requires a good philosophy of local enterprise.

The most important international integration has been thanks to the international trade of goods and intermediate services. In that context SME play key roll. For this reason they can take advantage of buying and selling opportunities and manufacture in the global markets.

According to the Observatory of Spanish Multinational Enterprise data, 68% of investments abroad between year 2000 and 2010 were made into Europe. 15% of investments were to Latam.

Doubtlessly, internalisation of enterprises requires an effort and attention. It is complex process, but at the same time gives response to an unstoppable trend and SME cannot ignore and competitiveness is more and more global.

Antoni Gómez. International chairman of Auren

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